The fact that GDP can only be entered here as low as -10% is an unworkable flaw in these calculations. Some time within, say, the next five years—after the debt bubble finally bursts—U.S. GDP will surely fall below -10%. After that happens, Chinese GDP will outpace U.S. GDP within a year or two.

"China's debt to GDP is about one quarter of that of the U.S."
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Are we sure about that?
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For Q2 of 2011 the McKinsey report on deleveraging put the total US debt at 279% of GDP. (page 13 of "Debt and deleveraging: Uneven progress on the path to growth").
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"at the end of 2010, the ratio was 184 percent in China" - page 14.
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That is for non-financial, household, financial and public debt.
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Now considering differences in time periods and possible issues about transparency, seems China may not be so far behind in the debt game.
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Of course it has a large reserve of foreign currency/holdings to deal with an adverse situation...

US output expanded at stupendous rate during the war years of the early 40s. In matter of fact, American gdp never grew in anything remotely approaching the rates of the early 40s, neither before, nor since.

Or China's debt bubble could burst... Or its housing bubble. Who knows? Seems over the past 30 years these kinds of problems bloom with unexpected force, out of the blue, or out of ignored corners.
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Look at the list:
1980s - Latin America, S. Korea, S&Ls in the US
Early 1990s - Housing bubbles in Europe, like the UK and Sweden; Japan's massive asset bubble popping; Mexico (I think - 1994?)
1998 - Russia, Asian Crises (including S. Korea)
2001 - US dot com bust (included more importantly telcos too), accounting scandals
2008 - Housing bubbles in the US and Europe, world financial crises

You, of course, are correct that China’s non-federal debt, regional debt in particular, puts the two nations much closer together. I’m not suggesting that China will be void of all repercussions of its own debt bubble(s), but I believe more of China’s debt has been used to fund infrastructure and production equipment, as opposed to the U.S.’s $17 trillion national debt that has been used almost entirely for consumption. (Perhaps China will get some return on its money, whereas the U.S. almost certainly will not.) Not to mention the future promises made by the U.S. government, which are absolutely unpayable without a (further) debasement of the currency.

For the record, I am by no means rooting for China or against the U.S.

It doesn't matter if something is measured in dollars or inches, bigger isn't always better. One can not simply measure the size without taking into account of the breadth, balance, sustainability, longevity. A short burst of exuberance followed by long periods of flaccid yearning as in the case of the Japanese or a series of intense one decade passion as characterized by the Latin American pump and dump would not work of the more long term oriented Chinese.

One a more serious note, China has been prioritizing the speed of growth at the expanse of environment and income equality for the last 30 years, some rebalancing is in order. The last thing China needs is more skewed growth driven by number envy. China will have reached the promised land not by a number but when a young man from Beijing or Shanghai could get an apartment and a wife, when a family from Shanxi or Gansu has the same opportunity as someone from the coast, when the Tibetans stop burning themselves and the Uighurs stop burning other people, When Dianchi has clear water and Beijing has clear sky.

A country with 4 times the population isn't going to remain at a quarter of the per capita income forever. If it takes until 2025 until the GDP of China becomes paramount, then so be it.

The Japanese grew pretty consistently from the Korean War on to the first energy crisis in 1973. There were some recessions in between (like the 1965 one). Growth resumed again, and continued on into 1991. It wasn't a short burst.
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Now what went on earlier this year looked like a short pop to be honest.
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I wouldn't be so quick with gross generalizations about any group of people either. The Japanese were once characterized as "long term oriented" into the early 1990s.

Now, the problem is that the algorithm seems a bit too simple. One can assume, say, that manufacturing may be revolutionized before 2020 by the new solid printing systems -something that is already happening in the aircraft industry- and see how manufacturing costs in the developed countries fall like a stone.

Then, of course, the Chinese are now *nearly* on the bleeding edge in many technological fields, and their ability to catch up is going to improve over time, rather than the opposite. The problem would come if the Chinese manufacturears suddenly have hundred million workers or so not needed anymore.

"And that's why it's a good thing that China's labor force is shrinking."

Yep. Beyond all its organizational shortcomings often due to the sheer size of the country, the Chinese leadership is pretty enlightened and I think they're somehow setting course to a new-new normal...

Apparently it is a moving finish line. Each successive estimate, moves the date up sooner and sooner. And this past 2008 Recession had frozen growth in America which was wholly unanticipated.

The closer we get to future, the more the future converges to us.
9 years ago the event was nearly 40 years away.
Two years ago it was 5 years away.
The Most Recent Forecasts using the Latest Data shows the Convergence is getting closer and closer.
And it will continue to get closer still.
It is not an annual almanac prediction but a stock ticker.

Chances are most of us will be alive to witness it.
And some will be eating their hat for dinner.
The fortune cookie says 2016.

The 2016 values is for PPP, which for China is 10 trillion in 2012 (with US at 14 trillion). So it's does take a whole lot of grows to pass it. (however, in this case, inflation and Yuan appreciation doesn't get factored in.

China's economy will grow to be larger than the US economy within the next 5-10 years. We're close enough now to be pretty sure of that. The question is, so what? The EU's economy is bigger than that of the US as well. The Yuan, like the Euro, could potentially replace the dollar as the reserve currency of choice one day, and that would make a difference, but only after the Yuan became fully convertible and their central bank proved its reliability over time. Pound sterling remained the reserve currency long after the US was a bigger economy; the US would have to continue to behave imprudently to lose the dollar its current role.

1. To justify airport expansion (I believe it was Toronto), a graph was developed that showed a similar exponential increase in number of departures like China's growth shown in the article. When projected infinitely, every man, woman and child would leave Toronto one day leaving it with none left!

2. Similar theories abounded when the Japanese economy was taking off. The land prices in Tokyo were so horrendous based on such speculation that the emperor's palace grounds were worth more than all of California! In the end, Japan lost its steam and fell to third place now.

China will also see a leveling off of its growth. Much of it is based on infrastructure projects by the government and once all the roads, airports and rail networks are completed, the growth rate has to moderate significantly just as in all developed countries. The US will invent and innovate to sustain its growth rate but China has not shown it can do so as well to keep growing at an exponential rate.

You have a very basic understanding of the predictions set out in this chart.

It is typical of people who hear the word exponential to make the arguments you set out in point "1.", probably because you think everyone (including TE) is ignorant of this.

Well, we're not. China has can quite easily average growth of 7% per year for the next 7 years.

"and once all the roads, airports and rail networks are completed"

Yea, maybe in 30 years. I don't think you've seen the infrastructure in the inner cities, or even the most developed cities. It is nowhere near over capacity.

"The land prices in Tokyo were so horrendous based on such speculation that the emperor's palace grounds were worth more than all of California!"

Japan was also a developed country, having caught up to and even surpassed the US at that time. The Japanese were almost 70% richer than the US at their height in the early 90's. Has China reached this stage? Not even close.

"The Japanese were almost 70% richer than the US at their height in the early 90's."
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Based on what metric? For GDP per capita at current US$, the World bank gave the following:
` 1989 1990 1991 1992 1993
United States 22,039 23,038 23,443 24,411 25,327
Japan 24,506 25,124 28,541 31,014 35,451

Come on, give me a break. China will grow less than 5% a year in years to come. USA is already catching up, will likely grow 2% a year. And please, don't forget the upcoming war between China and Japan